Precision Auto Garage uses a job order costing system to calculate the cost of custom engine overhauls. For the upcoming year, the following estimates were made: • • Engine parts: $940,000 Shop direct labor: $720,000 • • Shop equipment depreciation: $40,000 • • . • . Shop supervisor salaries: $92,000 Shop property taxes: $18,000 Shop supplies: $14,000 Advertising expense: $20,000 Administrative salaries: $80,000 Administrative office depreciation: $12,000 The average shop direct labor rate is $24 per hour. What is the predetermined shop overhead rate per direct labor hour?

Precision Auto Garage uses a job order costing system to calculate the cost of custom engine overhauls. For the upcoming year, the following estimates were made: • • Engine parts: $940,000 Shop direct labor: $720,000 • • Shop equipment depreciation: $40,000 • • . • . Shop supervisor salaries: $92,000 Shop property taxes: $18,000 Shop supplies: $14,000 Advertising expense: $20,000 Administrative salaries: $80,000 Administrative office depreciation: $12,000 The average shop direct labor rate is $24 per hour. What is the predetermined shop overhead rate per direct labor hour?

Principles of Accounting Volume 2

19th Edition

ISBN:9781947172609

Author:OpenStax

Publisher:OpenStax

Chapter2: Building Blocks Of Managerial Accounting

Section: Chapter Questions

Problem 4EA: Hicks Contracting collects and analyzes cost data in order to track the cost of installing decks on...

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Ans
What will be overhead rate per hour?
The predetermined overhead rate per direct labor will be
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